Nike sprints from offshore to onshore developers

ORLANDO - With its apps, sensors and devices, Nike is increasingly becoming a technology company.

It has developed running apps for Apple and Android devices, and Kinect training video games for Microsoft's Xbox. The company needs app developers, and like many companies, it has turned to offshore outsourcers for help.

But Nike found that offshore outsourcer developers don't understand some of the products that Nike is trying to produce.

The idea of wearable technology, having your active life recorded in one place, "didn't make sense to the people doing the work," said Christopher Davis, engineering director at Nike+ Running. The developers "didn't fit into the Nike culture."

This culture problem, as it is known in offshore outsourcing circles, was impeding Nike's agile development work, so the company shifted gears. It hired a small onshore developer, Catalyst IT Services, which has development centers in Baltimore Md., and Beaverton, Ore.

Nike began working with Catalyst in 2011 and Davis, interviewed at Gartner's Symposium ITxpo here this week, said the combined teams have "really meshed well. It turned into a partnership. The developers felt that they were part of the team."

Nike says the costs of using an onshore team are on par with the development costs using an offshore team. The code, though, was better and arrived with fewer defects from the onshore team, said Davis.

Davis said he prefers to work with onshore teams, in part, because everyone is in similar time zones. Nike does still use offshore outsourcers for testing work because the cost savings, in that case, make sense.

The Nike work has given Catalyst, a 200 employee company, some visibility. The company has been around since 2001, but didn't have anyone in a marketing position until this year.

Catalyst is one of an emerging group of onshore developers that compete with offshore outsourcers.

The growing popularity of the Agile development methodology, which requires fast turnaround of code and close interaction between developers and users, is helping to increase demand for onshore operations. Onshore developers are also doing a better job competing on price as offshore rates rise.

One big difference between Catalyst and competitors, says CEO Michael Rosenbaum, is its hiring process -- the company has six people charged with developing algorithms that are used to find developers.

Rosenbaum said resumes "tend to be pretty poor predictor of success" for developers.

A developer, for instance, may have a master's degree, and a company may pay a premium for it. But "we find no statistical correlation" between the degree and a person's performance, said Rosenbaum.

Instead of depending on resumes, Rosenbaum said Catalyst collects data from public sources to measure the performance of developers, and then search for people who are likely to work at a high level. "You figure out what your success metrics are and then you look for what correlates with it," he said.

The hypothesis that Catalyst uses is that the data "we look at tells us how people respond to uncertainty," said Rosenbaum.

Creating anxiety for a developer and measuring something such as keystrokes, may give one indication of how a developer may perform. "People who can respond to uncertainty in creative ways" can also "navigate around a problem [and] end up in general being higher performing developers," Rosenbaum said.

Rosenbaum won't describe the specifics of the metrics used in the hiring process, or the public sources of information he uses to build the company's methodology. But the effort to identify the highest performing developers is critical because it reduces cost and increases customer satisfaction, he said.

Rosenbaum said he's optimistic about the future of onshore development. "I think there is a whole segment of work that has been sent off shore that really works better domestically," he said.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His email address is pthibodeau@computerworld.com.

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